Maximizing email

While most marketers use email in some capacity, industry experts argue that many don't maximize the channel's value.

“Too many programs fail to incorporate customer data effectively, to deliver more targeted and relevant emails,” says Matthew Kirsch, senior manager of online marketing at DirecTV. “The challenge with social and other new technologies is that an emailer can expend time and money chasing the newest thing and fall further behind on the nuts and bolts that will make meaningful and measurable improvements in his or her program,” he explains.

According to the Direct Marketing Association's (DMA) “The Power of Direct” study released in October, email brought in $40.56 for every dollar spent in 2011. However, the DMA projects that this year email will bring in $39.40 for every dollar spent, and by 2016 it will bring in only $35.02. Since the channel is working adequately, many marketers are missing out on opportunities to fully capitalize on its power and are ultimately leaving money on the table.

For Marriott International, it's not enough to send generic emails to its customer database. The hotel chain, which drives a quarter of its website visits from emails checked on mobile phones, has to optimize its messaging for mobile devices. It also integrates emails with its Facebook page and the Marriott Rewards Insiders social platform to help increase engagement. This year, the company plans to apply an automated, data-driven, real time email marketing strategy to increase relevancy.

Due to its effectiveness and moderate costs, email is big business. According to Forrester Research's “US Interactive Marketing Forecast, 2011 to 2016,” email is expected to bring in $1.7 billion in revenue in 2012 and grow 10% annually through 2016, hitting $2.5 billion by 2016. However, while email revenue steadily rises, its growth trajectory won't keep pace with mobile and social media, which Forrester predicts will grow annually by 38% and 26%, respectively.

Despite the fact that tools for email segmentation, targeting and personalization have been around for almost a decade, some brands don't use them. “I'm surprised at how many email marketers aren't putting personalization and targeting into their campaigns,” says Heather Blank, VP of strategic services at marketing services company Responsys. “If you aren't doing that, you're completely missing the boat.”

Getting on the email boat

Ari Osur, principal analyst at Forrester, says a lot of email service providers are still trying to get their clients to leverage dynamic content in their messaging. “Even though the technology has been around for awhile, the data is not always in place to do it,” he says.

Despite rewards, some brands fail to send targeted emails

At Orbitz, targeting based on demographic and psychographic data is so refined that the company sends out campaigns to as little as 10 people.

Marketers who want to succeed with email should take a back-to-basics approach, Osur says. “Baking A/B testing into everyday operations is an area where email marketers can improve,” he says. “It is easy, powerful and can lift overall response rates significantly.”

“Brands are clearly losing money if they don't have the whole organization on the email boat yet,” says David Daniels, cofounder and CEO of The Relevancy Group, a market research company whose 2011 Executive Survey “The Connected Marketing Campaign Management Imperative” found that only 51% of marketing departments share common goals across all channels. With so many different silos handling customer communications, brands sometimes lose site of the consumer's viewpoint.

“Consumers see a brand name as one entity and they expect the same experience if they go to the store, go to a website, call the call center or get an email, but that experience is not always the same,” Daniels says.